Thursday, December 1, 2011

Crude Oil and Oil Stocks

One would logically expect oil stocks to track with crude oil prices. For the most part, this is true. Below are the correlation coefficients between a select number of oil services, drillers, refiners, integrated conglomerates, an oil sector ETF (XLE), and an ETF for accessing crude prices (USO), imperfect as it may be due to futures roll. Though most companies track with USO, there are a couple of exceptions. Transocean (RIG) exhibits low correlation with other sector companies and even a negative correlation coefficient with the commodity itself. Halliburton (HAL) has also been exhibiting very low correlation coefficient (0.16).

XLE

USO

HAL

SLB

CEO

PTR

PBR

NE

ROSE

MRO

COP

RIG

BP

XLE

1.00

0.80

0.50

0.79

0.87

0.84

0.67

0.85

0.79

0.93

0.90

0.31

0.87

USO

0.80

1.00

0.16

0.53

0.71

0.77

0.46

0.81

0.82

0.79

0.78

-0.11

0.79

HAL

0.50

0.16

1.00

0.88

0.65

0.19

0.89

0.20

0.55

0.63

0.12

0.57

0.15

SLB

0.79

0.53

0.88

1.00

0.87

0.50

0.96

0.50

0.77

0.89

0.47

0.43

0.51

CEO

0.87

0.71

0.65

0.87

1.00

0.74

0.83

0.64

0.74

0.91

0.68

0.22

0.71

PTR

0.84

0.77

0.19

0.50

0.74

1.00

0.42

0.85

0.62

0.73

0.84

0.13

0.84

PBR

0.67

0.46

0.89

0.96

0.83

0.42

1.00

0.45

0.75

0.83

0.32

0.43

0.39

NE

0.85

0.81

0.20

0.50

0.64

0.85

0.45

1.00

0.69

0.73

0.81

0.28

0.76

ROSE

0.79

0.82

0.55

0.77

0.74

0.62

0.75

0.69

1.00

0.89

0.60

0.15

0.66

MRO

0.93

0.79

0.63

0.89

0.91

0.73

0.83

0.73

0.89

1.00

0.74

0.25

0.78

COP

0.90

0.78

0.12

0.47

0.68

0.84

0.32

0.81

0.60

0.74

1.00

0.10

0.91

RIG

0.31

-0.11

0.57

0.43

0.22

0.13

0.43

0.28

0.15

0.25

0.10

1.00

0.05

BP

0.87

0.79

0.15

0.51

0.71

0.84

0.39

0.76

0.66

0.78

0.91

0.05

1.00

From 8/11/11 to today 12/1/11.

Disclaimer: I am currently long COP and may trade in or out of any of the above names. None of the above should be construed as investment advice. It is only for informational and entertainment purposes. Please consult a qualified financial professional before acting on any financial information.

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chitika

Disclaimer: I may trade in or out of any of the above names. None of the above should be construed as investment advice. It is only for informational and entertainment purposes. Please consult a qualified financial professional before acting on any financial information.